Boeing is implementing a voluntary payout plan that will allow eligible employees to exit the company with a pay and benefit package. The plan was specifically designed to reduce its workforce under extraordinary circumstances caused by the Covid-19 pandemic.
Reducing its workforce is expected to help Boeing preserve cash for the future, media reports said. Globally, airlines have suspended passenger flights and only selected cargo flights are in operation.
Prior to the pandemic, Boeing was already hit by the 737 Max crisis. The company’s decision to execute layoffs will allow it to gain move power over the situation and to cut costs.
Currently, Boeing is also exploring various funding options available at the moment, media reports said. The aerospace industry is challenged by the pandemic and it will take time for it to rebound.
Chief Executive Officer David Calhoun informed employees that “When the world emerges from the pandemic, the size of the commercial market and the types of products and services our customers want and need will likely be different. it’s important we start adjusting to our new reality now. We’re also doing everything we can … That means continuing to deliver for our commercial and services customers, even as their own businesses slow to a trickle.”
Boeing is the largest exporter in the US with a total workforce of 160,000 employees globally. Its buyout plan comes after its announcement to free hiring and overtime pay. On an estimate, 65,000 employees work on commercial aircraft while the remaining 25,000 work in manufacturing of parts and services, media reports said.